Convergence Partners Investments, a BEE company focusing on the Technology, Media and Telecommunications sector, today announced that it had taken a 25.55% stake in SkillPod Media (SkillPod), a pioneering South African online casual gaming company.
Established in 2003 by Mark van Diggelen, SkillPod began developing a dynamic proprietary content management system for online games.
Over the past five years, the company entrenched itself as a major player in the South African market whilst concentrating on developing world-class supporting systems.
A major differentiator for SkillPod is their ownership of the games' source code that they purchase thereby allowing them to create a turnkey solution for clients including branding and customisation. This has seen them successfully develop games to support marketing campaigns for a number of well-known brands including OUTsurance, KTV and Golf Digest.
The transaction will see SkillPod issue new shares resulting in Convergence Partners owning 25.55% of SkillPod while the existing shareholders, Mark van Diggelen and Brabys Media Holdings, will jointly own the remaining 74.45%. Brabys is a long-established specialist business directory publisher and owner of brabys.com and Ananzi.com.
The money raised through the deal will be utilised to expand internationally, enhance the content, and roll-out the platform to tap into the fast-growing global casual gaming and mobile content market.
Internationally, SkillPod already has a presence in India, USA and Canada and plans to expand in eastern European countries, Russia, China as well as increase its reach into North and South America.
Commenting on the deal, Andile Ngcaba, Convergence Partners' Chairman, said: "This investment enhances our exposure to the digital media market but also demonstrates the synergies which are materialising across our portfolio of investments. Online casual gaming is a sector that has experienced tremendous growth in the recent past and we believe that there are exciting convergence opportunities to be unlocked between the online and mobile content space in which we are already invested."
Convergence Partners has a particular interest in recent Web 2.0 developments and advertising-led online and mobile content. SkillPod has proven capabilities in the online, multi-player gaming environment with strong social networking features and working models to embed advertising into gaming offerings.
"International research shows that media consumption patterns are changing with gaming increasing its share dramatically and not only with so-called 'new generation' users," adds Ngcaba.
Through Convergence Partners, SkillPod will be exploring offerings and cross-selling opportunities with other companies in the Convergence Partners portfolio, specifically those with interests in digital content and online platforms.
Commenting on the deal, Mark van Diggelen, CEO of SkillPod Media said: "We are pleased to have found a strategic partner with a proven track-record, in-depth sector knowledge and the ability to provide us with the necessary support to carry out our growth plans.
"We look forward to working with Convergence Partners as we entrench ourselves as market leaders locally and abroad."